Indian seafood exporters to benefit as US lifts CVD on shrimp

The number of Indian exporters to the US declined drastically from 280 in 2005 to 68 in 2009. Since 2010, though, exports to the US have been picking up after Washington slashed the duty to 3.49 per cent. The US imported 92,447 tonnes of marine products, valued at ₹ 4,027 crore, from India during 2012- 13 against 68,354 tonnes (₹ 2,978 crore) in 2011- 12. There has been a 35 per cent rise in both volume and value of exports in FY13.Exporters have always held CVD as a serious threat.

The USITC’s latest decision to withdraw CVD is a welcome step, said leading Kochi- based exporters.A J Tharakan, president, Seafood Exporters Association of India ( SEAI), told BusinessStandard this was a major victory. 

If CVD continues, India cannot compete with other south- east Asian countries such as Thailand in the US market and Indiais now in an advantageous position to compete with leading shrimp exporting countries, he added. Already, the US imposes 3- 4.5 per cent duties under various heads. 

“ A high rate of CVD will seriously affect our exports to the US.Also, if they ( US government) decide to execute bonds for exports, it will further weaken our position,” said an exporter. Indonesia and Thailand were expected to benefit because there was zero duty for them in the final duty determination of the US department of commerce ( DOC). 

However, there was large- scale loss in production due to early mortality syndrome ( EMS) in Thailand and Indonesia. Therefore, these countries had to import from India to meet their commitments in the US market, said Anwar Hashim, former president of SEAI. With the CVD vanishing, India can compete with other major producing countries on price, said a leading exporter. 

“ Fortunately, EMS is not present in aquaculture farms in India and production is in full swing . So, the USITC decision will be advantageous to India,” he added. Due to CVD ( 5.85 per cent) and the present level of antidumping duty ( 3.49 per cent),India’s shrimp exports to the US would have been costlier than any of its closest competitors.

Moreover, if CVD was imposed, it would have helped Thailand and Indonesia to dominate the US shrimp market and market access for Indian shrimp would have been affected.Leena Nair, chairman of Marine In May, DOC had determined a and reduced the duty to In August, Washington raised Indonesia, the No 1 and No 3 suppliers of shrimp to the US, de- minimis duty.

China got 18.61 per cent, Malaysia 54.5 per cent and Vietnam 4.52 per cent duty in the final determination. China’s was 5.76 per cent. Thailand, though, had a sigh of relief as it had 2.09 per cent duty in the preliminary determination. ForVietnam, it was 6.07 per cent in May. Malaysia’s duty had been reduced from the earlier 62.74 per cent.All the seven countries together export 70 per cent of the total shrimp imports to the US. 

But with Thailand and Indonesia excluded, the countervailing duties practically applied only to 40 per cent of the US imports, leaving 60 per cent of imports untouched. According exporters, this takes away the rationale of providing protection from injury for the domestic producers.